Thursday, March 26, 2009

House Committee Endorses Less Restrictive "Bonus" Measure

The House of Representatives Financial Services Committee has endorsed a measure that would give the Treasury Department the authority to determine whether the public should become outraged over executive bonuses for TARP participants. Actually, the measure would give the Treasury Department the discretion to say whether executive compensation at bailed out banks was too excessive. But I suppose public (and media) outrage would closely track the Treasury Department's position on the issue. Although the measure would give the Treasury Department the authority to determine when executive compensation has gone too far, earlier this year, officials in the department pressured Senator Christopher Dodd to remove language from a provision he sponsored that would have prohibited highly controversial bonus payments made by AIG.

The measure would not apply to participants in the proposed trillion-dollar "toxic assets" purchase plan. Recently, White House economic advisor Christina Romer described potential investors in the plan as the "good guys," and media outlets reported that prospective investors had already warned the government not to limit their ability to compensate executives.

Committee Chair Barney Frank, reflecting arguments from the Obama administration, says that flexibility would encourage wider participation in the program. I guess this means that executives will not be subjected to random drug tests, as some states are considering imposing upon recipients of welfare and unemployment benefits.

2 comments:

The Treasury Department may "determine" whatever it likes, and the media can track whatever they like. As for the public outrage, they all might as well be solemnly adjudicating whether or not the Sun should be allowed to rise tomorrow. These troglodytes have no idea what's gonna hit them if they keep on playing business as usual.

About Me and the Blog

Professor Darren Hutchinson teaches Constitutional Law, Remedies, Race and the Law, and a Civil Rights Seminar at the University of Florida Levin College of Law. Professor Hutchinson also holds the prestigious Stephen C. O’Connell Chair.
Professor Hutchinson received a B.A. from the University of Pennsylvania and a J.D. from Yale Law School. Before teaching law, Professor Hutchinson practiced commercial litigation at Cleary, Gottlieb, Steen and Hamilton in New York City. He also clerked for the late Honorable Mary Johnson Lowe, a former United States District Judge in the Southern District of New York.
Professor Hutchinson's research has appeared in many prestigious journals including the Cornell Law Review, Washington University Law Review, UCLA Law Review, University of Michigan Journal of Race and Law, and University of Pennsylvania Journal of Constitutional Law.
He has also presented his research at numerous universities, including Yale, Stanford, Columbia, University of Pennsylvania, University of Michigan, University of California at Berkeley, University of Virginia, Cornell, Georgetown, and Boston University.

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